With the long-awaited breakup of the Boston-based technology giant General Electric finally here, the first company to spin off, GE HealthCare, rose steadily, gaining 8% in its first market day.
“GE reached a significant milestone in our transformation today, successfully spinning GE Healthcare as an independent publicly traded company,” said Steve Winoker, GE Vice President of Investor Relations, shortly after the market opened.
GE HealthCare Technologies Inc, listed under the ticker GEHC, closed up 8% on the Nasdaq index, reaching $60.49.
Boston-based GE announced plans to split into three companies — healthcare, aviation and energy focused — in 2021. The healthcare branch was the first to break off, with the energy wing GE Vernova to follow in early 2024. The remainder of company will then become GE Aerospace.
Despite the split, GE still retains 19.9% of GE HealthCare.
The pandemic and supply chain issues hit the company hard, and GE stock fell again 11.3% in 2022. After the split Wednesday, GE’s shares also bounced up by over 5% by the market close.
“We were really trying to make sure we had a clear view as to the best roadmap for the businesses going forward,” said Larry Culp, Chairman and CEO of GE and GE Aerospace. “And I think through a host of considerations, we were of the view unanimously that three businesses operate in such different marketplaces appeal not only to different customers, but the different investors.”
Culp added that the company is “on track and confident in our plans.”
GE HealthCare includes four business segments: Imaging, Ultrasound, Patient Care Solutions, and Pharmaceutical Diagnostics.
GE stockholders received one share of GE HealthCare for every three shares of GE common stock they held.
The healthcare division reported $13.4 billion in revenue in the first three quarters of 2022, ending in September. The company will release total earnings for the year on Jan. 30.
Looking ahead at operations for GE, Culp said, “for us, we want to make sure we’re focused on job-one of running our businesses well.”
Culp said at GE Aerospace, the company is seeing a rebound in terms of commercial travel and that “we know our military customers are looking for more deliveries from us in ’23 than they did in ’22.”
In the Vernova division, Culp said the transition across the energy business will drive growth and pointed out to Europe, where the energy market has been hit by the war in Ukraine, and the Inflation Reduction Act in the US, as two factors that have contributed to a “sea change relative to the energy transition,” and GE’s role in it.